Oil Hits $70 as Mideast Crisis Deepens Fear of Supply Disruption

Oil extended its dramatic surge above $70 a barrel as the fallout between the U.S. and Iran escalated after the assassination of one of the Islamic Republic’s most powerful generals.

Futures jumped by another 3% on Monday as the U.S. State Department warned of a “heightened risk” of missile attacks near military bases and energy facilities in Saudi Arabia. Prices got a further boost as President Donald Trump reiterated threats of retaliation should Iran “do anything” and vowed heavy sanctions against Iraq if American troops are forced to leave OPEC’s second-biggest producer.

The wild ride continues for oil as Washington and Tehran trade bellicose rhetoric, ratcheting up fears of a wider conflict that could disrupt supply from the world’s most important producing region. Crude was last this high when Saudi production facilities were attacked in September, knocking out about 5% of global output.

Trump said he’s prepared to strike “in a disproportionate manner” and attack more than 50 sites if Tehran retaliates against the killing of General Qassem Soleimani. The Middle East nation said it has to “settle a score with the U.S.” and that it would no longer abide by limits on its enrichment of uranium. A vote by Iraq’s parliament to expel U.S. troops from the country deepened the fallout.

Brent futures rose as much as 3.1%, or $2.14, to $70.74 on ICE Futures Europe and were at $70.20 at 05:41 a.m. in London. The contract surged 3.6% on Friday. West Texas Intermediate advanced 2% to $64.29 on the New York Mercantile Exchange.

Source : Bloomberg

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